Decentralization of Forest Administration in Indonesia, Implications ...

Barr, C. et al. 103
Under decentralization, HPH-holders have also been concerned about the introduction
of new taxes and fees on the timber they harvest. Suparna (2002), for example, reported
that in addition to several fees charged to large-scale concessionaires based on Law
41/1999, provincial and district government also introduced several new types of
fees for timber concessions. In East Kalimantan, for example, the Governor issued
decrees stipulating charges to concessions such as a ‘compensation fund for local
communities’ (dana kompensasi kepada masyarakat) amounting to Rp 3,000 per m 3 ;
and a ‘fund for human resource development, science and technology development,
and investment in forest conservation’ (dana pembinaan sumber daya manusia dan
pengembangan ilmu pengetahuan dan teknologi serta dana investasi pelestarian
hutan) at Rp 15,000 per m 3 logs with diameter 30 cm or longer. Although not all
Governors issue these kinds of charges, similar fees have apparently been adopted in
several other forest-rich provinces.
5.6 A Pendulum Swing Toward Recentralization
From the outset of Indonesia’s decentralization process, MoF has engaged in a
tug-of-war with district officials over the degree to which administrative authority
over lucrative timber resources should be shared between the central and regional
governments. As described above, the Ministry responded to the widespread
proliferation of HPHH and IPPK operations in 1999-2002 by taking active measures
to halt the allocation of small-scale district logging permits in the Forest Estate.
These measures intensified in early-2002, when the Ministry initiated a series of
regulatory changes which effectively recentralized control over the allocation of
timber concessions and small-scale logging permits – and many other aspects of
forest administration. Since then, there has arguably been a swing of the political and
regulatory pendulum in the forestry sector back towards the Jakarta.
With the issuance of Ministerial Decree 541/2002 in February 2002, the MoF
revoked the authority of district and provincial governments to allocate IUPHHK
licenses – which, by then, were being phased in to replace the HPH as the principal
license for large-scale timber concessions. 9 Governors and Bupatis had been given the
authority to issue IUPHHK licenses in Production Forests within their jurisdictions
in November 2000, as long as the new licenses did not overlap with areas already
assigned to HPH concessionaires or other types of forest license-holders. As noted
earlier, some district governments took advantage of this opportunity to distribute
IUPHHK licenses covering fairly significant areas. Decree 541/2002 prohibited them
from doing so after March 1, 2002.
In June 2002, the MoF’s reassertion of control over the timber concession
licensing process was consolidated further with the issuance of Regulation 34/2002
on Forest Administration and the Formulation of Plans for Forest Management, Forest
Utilization, and the Use of the Forest Estate. As detailed in Chapter 3, Regulation
34/2002 shares the highly centrist tone of Law 41/1999 on Forestry, and it assigns
principal authority in most important aspects of forest administration to the central
government. This includes the allocation of IUPHHK timber concession licenses.
Specifically, Regulation 34/2002 allows the Minister of Forestry to issue IUPHHK